Optimal non-profit compensation (in Effective Altruism)

Cross posted from a thread on the EA forum

Great question- prompted me to think more about this problem.

I maintain that the most elegant solution might be for EA orgs to pay slightly below market-rate (with a progressive element). But I'm quite uncertain about this and I'd love for people to think more about optimal compensation at EA orgs.

Some more thoughts on this:

I very much agree with the central argument made here that we should not have EAs live with a poverty mindset and sweat the small stuff. I think it's a very big problem that creates a lot of lost utility. I also think a behavioral economics angle might make sense here (many people might irrationally be too frugal to increase their productivity).
My point was not about the absolute level of pay for a given position, which maybe should be higher. Concretely, we can still pay $100/h for an office assistant, but this will inevitably attract better candidates. This should take care of a lot of 'card charge scenarios' (e.g. I saw a job ad for high impact PA at ~$30/h recently, and ACE CEO for less than $100k/y, which seems low).
It's also not about the absolute level of funding for orgs, which should maybe also be higher. In other words, we might want to hire 2 office assistants for 40h/week rather than 1 person for 80h /week, especially at lower salary levels. This way, a person on $50/h or $100k/y can deal w/ a $100 card charge, but only after a 40h work week, where they can add 10h of life admin that is worth more than their salary. This is theoretically equivalent to someone doing part-time EtG when it's above their salary level (with incentives neatly aligned i.e. they'll know best what life admin to outsource). At scale, the advantages of division of labor from focusing more on one's job might not outweigh diminishing returns to increasing hours spent at the office.
Note that you have card charge-like scenarios even if you pay above market rates. But even if you only pay $99k/y for people whose market rate is $100k/y, this will detract those who only care about money, for only $1k a year. But the benefits of this are small as it only lets you outsource at most ~10h of life admin like card charge scenarios. Seems like a small price to pay for having EA org employees being value aligned and less likely to shirk.
Also, if employees forgo just some luxury goods and conspicuous consumption in their social reference class (not saying one should never go on holidays or to restaurants), one could afford everything that would make one instrumentally more effective.
We should think more out of the box with perks. NYC academics for instance often get subsidized university housing in the city that has a high market value and makes them more efficient. This seems to align incentives well, but maybe that's too much of a faff administratively. Companies like Amazon are doing this.
If your job ad says 'we pay $X', then you'll attract candidates whose market clusters around $X. Auction theory suggests that the best applicant who gets offered the job will have a market rate slightly higher than X.
We can have steady salary increases that match an employee's current market-rate to retain them. This would have the features of efficiency wages or even cheerful price.
Performance-based pay is also something that is under discussed in EA,
Anthropic has optional equity donation matching, iirc it's quite high like 3x- that could be another thing that should be explored more.

Again maybe salaries should generally be higher to attract better candidates, maybe there's something generally amiss here… consider that:

The Givewell CEO makes ~$300k/y, but they move ~1000x as much money. Increasing the salary by $1m would only need to lead to a 0.3% increase in money moved to break even. Ideally, the compensation would include impact certificate equity that is traded.

Analogously:

In the US, senators and governors make $175k. The president and the highest paid civil servant (CMO- Fauci) (make ~$400k/y, the vice makes $260k).
UK MPs earn ~$100K/y. In contrast, median executive pay at the 300 of the biggest U.S. companies is ~$14M. Imagine increasing their pay to $1M/y- 650 MPs would then earn $0.65B. If they'd counterfactually raise UK GDP by just 0.1%, then the cost-benefit ratio would be about 5 (see 0.1% of UK GDP is $2.7B). In the US, it might be ~10x higher.
If that's unpopular to increase politicians pay, then maybe we could increase pay of senior civil servants working in the central government. In the UK, the Department for Trade pays people $350k/y source

But Optics matter as well (at the very least instrumentally). Elsewhere in this thread someone called a $125k/y salary a 'vow of poverty', and that seems tone-deaf.

I thought this recent quote was relevant here and resonated:

For the people who are Doing Thing, a lot of their time is spent on Stupid Stuff, and they must Beware Trivial Inconveniences and the expenses involved in various actions. This eats up a large portion of their time and cognitive efforts.

Even remarkably small stupid stuff can eat up a remarkably large amount of time that could otherwise have been useful. Having a good, well-equipped and stocked place to work, where you get meals taken care of and can meet with people and interact spontaneously and other neat stuff like that is a big game. So can 'stop worrying about money' either in general or in a particular context, or 'not have to run these stupid errands.' Life is so much better when there's other people who can take care of stuff for you.

A lot of work and potential work, and a lot of community things and events, and many other things besides, are bottlenecked by activation energy and free time and relatively small expenses and stuff like that. Even I end up worrying a bunch about relatively small amounts of money, and getting time wasted and rising stress levels about things where the stakes are quite low, and fussing with stupid little stuff all the time. You really could substantially increase the productivity (although not at zero risk of weirdness or distortions of various kinds) of most of the people I know and almost anyone not high up in a corporation or otherwise super loaded, if you gave that person any combination of:

A credit card and told me 'seriously, use this for whatever you want as long as it's putting you in a better position to do the stuff worth doing, it doesn't matter, stop caring about money unless it's huge amounts.' More limited versions help less, but still help, and for someone more money constrained than I am, all this doubtless helps far more.
A person I could call that would be an actually useful secretary and/or concierge, especially someone who could run around and do physical tasks. We have a nanny for the kids, and that helps a ton, but that alone doesn't come anywhere near what would be useful here. The only concierge service I know about, which I somehow got access to, is completely useless to me because it assumes I'm super rich, and I'm not, and also the people who work there can't follow basic directions or handle anything at all non-standard.
A person I could have do research for me and figure things out, assemble spreadsheets, that sort of thing.
A nice office space and hangout space I could use and take people to, especially where other interesting people also often went, and where everything was made easy, ideally including free food.

And I think that applies to basically everyone who hasn't already gotten such things handled. And it's a shame that we can't find ways to get these sorts of things usefully into the hands of the People Doing Thing that we think are special and the limited resource that actually matters.